The Fed’s new AI obsession
Chicago Fed President Austan Goolsbee basically said the quiet part out loud: AI spending is getting big enough to strain the real economy. Not the futuristic slide-deck version of the economy — the one with actual electricity bills, construction crews, copper, and equipment shortages.
That matters because when demand starts bumping into supply constraints, inflation doesn’t just casually stroll in. It barges through the front door like it owns the place.
The boring stuff suddenly looks exciting
If you’ve been hunting for the AI trade, you probably started with chips and cloud names. Fair. But this piece argues the next layer of the boom may be hiding in the stuff that makes data centers physically possible:
- utilities and transmission
- construction and industrial equipment
- raw materials like copper
- energy and nuclear power
That’s why ETFs like XLU, PAVE, COPX, XLE and URA are getting dragged into the conversation. Not because they’re sexy, but because AI can’t live on software alone. It needs a lot of steel, wires and juice.
The bottleneck trade, basically
The article points to forecasts showing data-center power demand surging and notes that copper alone may be the monster input behind a lot of AI infrastructure buildout. In other words: the next AI winners may be the picks-and-shovels companies selling the picks and the shovels — plus the power to run them.
For you, the investor takeaway is simple: if AI spending keeps pushing against capacity limits, the inflation story could get stickier, and the market may start rewarding the unglamorous plumbing of the boom.
Big picture: AI might still be the coolest theme on Wall Street, but the bottleneck is looking very old-school.